IBC, FSCO make submissions for Ontario committee’s auto insurance hearings

The Insurance Bureau of Canada and the Financial Services Commission of Ontario were among the groups who have made submissions to a provincial legislative committee looking at auto insurance issues.

The Standing Committee on General Government first began examining auto insurance last May, but its work was interrupted when the provincial parliament was prorogued. This week, the committee is holding two hearings to hear from various stakeholders.

Read more: Ontario legislative committee beginning public hearings on auto insurance

In its submission for the first hearing on April 15, IBC reiterated its point that rising costs are resulting in rising premiums, and the best way to combat that is through reforms tackling fraud in the province.

Specifically, IBC listed giving more power to FSCO to regulate health clinics, province-wide regulation of the towing industry, and addressing the backlog of mediation cases as steps to tackling rising costs and premiums for Ontario drivers.

IBC also said the passage of amendments to the Personal Information and Electronics Documents Act (part of Bill C-12) is critical, as it would “remove any undue limitations on the ability of insurers to pool claims information to combat fraud.”

FSCO also made its own submission April 15, which includes a general overview of its role in regulating auto insurance in Ontario.

In its submission, FSCO touched on territorial rating in the province. “As the auto insurance system has evolved and population has increased, insurance companies have expanded the number of territories to better reflect risk and claims experience,” the submission says.

“Territorial rating enhances the ability of insurance companies to underwrite and price risk more accurately by linking premiums to claims experience in the different territories,” the document says.

“In a jurisdiction as large as Ontario with a mix of urban and rural areas, significant climate differences, variable road quality and traffic density, alongside other differences, eliminating territories would significantly increase cross-subsidization of drivers in higher claims areas by those in lower claims areas,” FSCO says.

The hearings also include submissions from accident victims’ group FAIR Association, the Insurance Brokers Association of Ontario and the Ontario Trial Lawyers Association, and other stakeholders.  The second hearing will take place April 17.